A UK property company was concerned that ground
contamination issues at one of its properties could
present significant future liabilities. The premises, now the
site of a prestigious leased office development, had
previously formed part of a major gasworks facility.
Although remedial works had been undertaken in the
mid 1990s to the satisfaction of the planning authority,
the standard of remediation would almost certainly not
have met current remediation standards. It was evident
that residual tars and contaminated groundwater had
been left beneath the site, potentially requiring further
clean-up to satisfy environmental regulators in the future.

Willis succeeded in placing environmental insurance to
cover the current owner for a period of 10 years, even in
the event that they undertook minor development works
or ground investigations at the site (such activities are
normally excluded by insurers, due to the potential to
encounter contamination). The policy was transferable
(for example to a future purchaser) and included an
option to continue extending the policy annually beyond
the initial 10 years.

Through the use of insurance, the owner gained comfort
that the costs of any future additional clean-up as a
result of increasingly stringent legislation or third party
action would be met. In addition, the broad coverage
negotiated by Willis would be attractive to a potential
purchaser and thus help maximise the property value
during future sale negotiations.